[jeff]

Welcome to the Q4 2016 CPA Exam Study Group for REG.

If this is your first post in the study group – please post your target exam date (just the time frame to preserve your anonymity), and your past history with this exam (optional, of course).

[jpowell31]

yep. because it's under $500 it doesn't need to be in writing and because it falls under the UCC no further consideration is needed to change the contract (the opposite of the common law issue we were chatting about the other day). it's also not a firm offer because Mason isn't a merchant.

[jpowell31]

One more before i head home and probably unsuccessfully try to get someone to fix my internet again 🙁

Ames Construction Co. contracted to build a warehouse for White Corp. The construction specifications required Ames to use Ace lighting fixtures. Inadvertently, Ames installed Perfection lighting fixtures which are of slightly lesser quality than Ace fixtures, but in all other respects meet White's needs. Which of the following statements is correct?

A. White's recovery will be limited to monetary damages because Ames' breach of the construction contract was not material.
B. White will not be able to recover any damages from Ames because the breach was inadvertent.
C. Ames did not breach the construction contract because the Perfection fixtures were substantially as good as the Ace fixtures.
D. Ames must install Ace fixtures, or White will not be obligated to accept the warehouse.

[jonm857]

Answer is A. Nonbreaching party can recover money damages.

B - 81
A - 87
R - 73
F - July 5th

[jpowell31]

indeed you are correct sir. okay i'm out for the night. i'll be making a super sweet 1040, including schedule A-F summary when i get home so will share tomorrow along with rewriting out AMT and other calcs/summaries not conducive to typing out..

[Reg_Slayer]

non-accountable plan = employer is not accountable, so expenses REPORTED on employee's w-2. = INCOME ABOVE THE LINE
[Any expenses taken against the gross amount received are considered 2%BIT] = ITEMIZED BELOW THE LINE

VS

accountable plan = employer is accountable, so not even reported as expenses not on w-2.

[jonm857]

I'm starting to freak out. Test in 12 days.

B - 81
A - 87
R - 73
F - July 5th

[Reg_Slayer]

keep calm and remember that the additional standard deduction is 1,250 each. (blind, over 65, etc…)

[jonm857]

I'm going old school on this beast. There's no point in running through MCQs over and over and over again when youve memorized the answers. Time to open the book and go after the nuts and bolts theory of it all.

B - 81
A - 87
R - 73
F - July 5th

[Reg_Slayer]

deductible investment interest expense is the lesser of: [itemized sch A]

-net investment income
OR
-investment interest expense.

[Anonymous]

Hey guys, I got a question that got me confused a bit:

Sheri received jewelry as a gift from her aunt, Amy. At the time of the gift, the jewelry had a fair market value of $54,000 and an adjusted basis of $19,000. This was the only gift that Sheri received from Amy during 2015. If Amy paid a gift tax of $8,000 on the transfer of the gift to Sheri, what tax basis will Sheri have for the jewelry?

A) $19,000
B) $25,000
C) $26,000
D) $27,000

Why is the answer $26,000 and not $19,000 carryover basis since the jewelry appreciated in value.

[Reg_Slayer]

@Cpamaster007:

donor's adjusted basis:
19

Portion of the gift tax attributable to the appreciation in value:
8 * [35/ (54 – 14 exclusion amount)]
=7

19 + 7 = 26

[Anonymous]

Thank you Reg_Slayer

[Reg_Slayer]

again since i don't yet have it down:

requirements of an ISO.
1. LESS THAN (or equal to) 10% shareholder.
2. option price >= FMV [date of grant]
3. Stock held @ least 2 years from the date of grant and at least 1 year from the exercise date.

requirements of an ESPP
1. LESS THAN (or equal to) 5% shareholder.
2. option price must be less than the lesser of:
-85% of the stock price when granted
-85% of the stock price when exercised.

[Anonymous]

I gave up on C Corps and moved on to business law. Going to have to circle back around to tax next week and then my exam is in another week and a half 🙁 geez this is miserable

[Reg_Slayer]

Self-Employed Health Insurance = deductible above the line

Medical and hospital insurance premiums = deductible below the line.

Personal disability insurance premiums = not deductible

[Author]

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